Denmark drops RI as candidate for aid

Denmark drops RI as candidate for aid

JAKARTA (JP): Denmark has dropped Indonesia as a candidate to become one of the country's main aid recipients due to the shaky political climate, officials said on Wednesday.

Cooperation Minister Anita Bay Bundegaard told legislators at a meeting on Tuesday that Indonesia's failure to decentralize its institutions and the strength of separatist movements would make Danish involvement "highly risky," the officials said as reported by AFP in Copenhagen on Thursday.

However, observers in Jakarta criticized the decision and expressed their surprise over the reasons given by the Danish government.

Denmark has listed 18 "cooperation partners" from among the poorest developing nations in the world to receive its development assistance, the news agency reported.

India and Nigeria were taken off the list late last year and Indonesia, along with Ethiopia and Cambodia, were candidates to replace them.

Bundegaard's decision not to bring Indonesia onto the list drew criticism from the federation of Danish industry.

"We deplore this decision ... because we think that Indonesia is an appropriate candidate for receiving Danish aid," said federation official Peter Bo Andersen.

"There are 100 million people in Indonesia living on less than two U.S dollars per day, which corresponds to the level of poverty required by Denmark to provide aid," he said.

Denmark is a member of the Consultative Group on Indonesia (CGI), a group of major donors to Indonesia, which last year pledged US$4.7 billion in loans.

Hadi Soesastro, an economist at the Center for Strategic and International Studies (CSIS), called Denmark's move "bad diplomacy".

"It is a strange decision that doesn't make sense," he told The Jakarta Post.

"I can understand if the private sector cancels investments here because of political uncertainties, but I don't expect that from a government aid institution," he went on.

He said that if Danish officials were worried about security conditions, they could postpone several aid projects but not stop aid altogether to Indonesia.

However, Hadi was confident that other countries are unlikely to follow Denmark's decision.

"Denmark's move is a single, isolated case. We shouldn't be worried too much about it," he added.

Separately, chief economist at the United Nations support facility for Indonesian recovery Satish Mishra dismissed Denmark's move as having a minor impact on Indonesia.

"I would start worrying if Japan, the United States, or Australia decided to cut their aid to Indonesia," he said.

Mishra said these countries, which were of geopolitical importance to Indonesia, showed no sign of intending to reduce their aid commitment.

"Actually, the U.S. might raise its support to Indonesia," he said, adding that such a move was likely given the policy under the new U.S. government.

Mishra added that a country's foreign aid target depended largely on its foreign policy.

According to him, Scandinavian countries like Denmark, Finland or Norway had only minor historical bindings to Indonesia.

These countries, he said, had their aid priorities closer at home.

"They are large donors to East European countries, in particular to Russia," he said.

But Mishra questioned the reasons stated by the Danish government to scrap Indonesia as a candidate for additional aid.

He said that political uncertainties should not have prompted donor countries to cancel their aid programs.

"Otherwise, some countries in Africa are not entitled to receive any aid at all, because some of them don't even have a government," he said.

Mishra said that most donor countries reduce their aid only because the necessary funding has been cut from the state budget.

He speculated that Denmark might have changed its aid priorities or were having a budget cut.

"I can't tell, that is an internal matter for Denmark," he said. (bkm)